Plants & Equipment: Steadier

From the Commerce Department and the Securities and Exchange Commission last week came encouraging--though hardly bullish--news about business spending on new plant and equipment. In 1960, said the agencies, this spending was cut back only 4%, will run about 10% ahead of 1959. It was the Government's third downward revision--to an annual rate of $35.7 billion--of its original estimate of $37 billion. But the drop-off was so small that it was not a major depressant on the economy. While the report estimated that plant and equipment outlays will slide further to $34.9 billion in the first quarter of 1961, this prospect was not as bad as earlier expectations.

With this news, even steelmen, who have been wrong about their 1960 prospects so often that they have lately maintained a discreet silence, felt more optimistic. U.S. Steel Chairman Roger M. Blough, who last October said that inventories would drop to the 11-12 million-ton level by November, reported in a letter to stockholders that inventories had reached "about the same level they were at the end of the 1959 strike, an estimated 10-11 million tons," and are not likely to undergo "any appreciable further cut. The prospect of an improved operating rate in steel seems much more substantial than anything to the contrary."

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